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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Ramesh and Umesh were partners in a firm sharing profits in the ratio of their capitals. On 31st March, 2025, their Balance Sheet showed Creditors ₹1,70,000, Workmen Compensation Reserve ₹2,10,000, General Reserve ₹2,00,000, Ramesh’s Current Account (Cr.) ₹80,000, Capitals – Ramesh ₹7,00,000, Umesh ₹3,00,000; Bank ₹1,10,000, Debtors ₹2,40,000, Stock ₹1,30,000, Furniture ₹2,00,000, Machinery ₹9,30,000, Umesh’s Current Account (Dr.) ₹50,000. On the above date the firm was dissolved. (a) Ramesh took over 50% of the stock at ₹10,000 less than book value; the remaining stock was sold at a loss of ₹15,000; Debtors were realised at a discount of 5%. (b) Furniture was taken over by Umesh for ₹50,000, and Machinery was sold for ₹4,50,000. (c) Creditors were paid in full. (d) There was an unrecorded bill for repairs of ₹1,60,000, which was settled at ₹1,40,000. Prepare the Realisation Account.
REALISATION ACCOUNT
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| To Debtors A/c | 2,40,000 | By Creditors A/c | 1,70,000 |
| To Stock A/c | 1,30,000 | By Ramesh’s Current A/c (Stock taken) | 55,000 |
| To Furniture A/c | 2,00,000 | By Umesh’s Current A/c (Furniture taken) | 50,000 |
| To Machinery A/c | 9,30,000 | By Bank A/c: | |
| To Bank A/c (Creditors paid) | 1,70,000 | Stock 50,000 | |
| To Bank A/c (Outstanding Bill paid) | 1,40,000 | Debtors 2,28,000 | |
| Machinery 4,50,000 | 7,28,000 | ||
| By Loss transferred to: | |||
| Ramesh’s Current A/c 5,64,900 | |||
| Umesh’s Current A/c 2,42,100 | 8,07,000 | ||
| Total | 18,10,000 | Total | 18,10,000 |
Working Note: Profit-sharing ratio (by capital) Ramesh : Umesh = 7 : 3. Ramesh takes 50% of stock (₹65,000 book value) at ₹10,000 less = ₹55,000; remaining stock (₹65,000) sold at a ₹15,000 loss = ₹50,000. Debtors realised at 5% discount = 2,40,000 × 95% = ₹2,28,000. Loss of ₹8,07,000 split 7 : 3: Ramesh ₹5,64,900; Umesh ₹2,42,100.
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Chapter 7 Q.20 - Dissolution of a Partnership Firm", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 7 - Dissolution of a Partnership Firm.
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